If someone could please answer these. I know part for question 1 is wrong. Tuna
ID: 2382158 • Letter: I
Question
If someone could please answer these. I know part for question 1 is wrong.
Tuna Company set the following standard unit costs for its single product. The predetermined overhead rate is based on a planned operating volume of 60% of the productive capacity of 40,000 units per quarter. The following flexible budget information is available. During the current quarter, the company operated at 70% of capacity and produced 28,000 units of product; actual direct labor totaled 222,000 hours. Units produced were assigned the following standard costs: Actual costs incurred during the current quarter follow: Compute the direct materials cost variance, including its price and quantity variances. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the " " sign in your response.) Compute the direct labor variance, including its rate and efficiency variances. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the " " sign in your response.) Compute the overhead controllable and volume variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the " " sign in your response.)Explanation / Answer
price/rate variance = (actual price-std. price)*actual usage
quantity/efficiency variance = (actual quant. - std quantity)*std price
total variance= actual cost - std cost
using above formulae
answer 1
a) 3079100 - 3024000 = 55100 u
b) (4.1-4)*751,000 = 75100 u
c)(751000-756000)*4 = -20000 f
answer 2
a) 1720500-1792000 = -71500 f
b)(7.75 - 8)*222,000 = -55500 f
c) (222,000 - 224000)*8 = -16000 f
answer 3
CONTROLLABLE VARIANCE
=actual factory overhead - budgeted allowance on Std hours
*BUDGETED ALLOWANCE ON STANDARD HOURS
=Fixed Normal Capacity *Std rate + Standard Hours * std. rate
=1344000 + (224000*8) = 3136000
=> cont. var = (1968679 + 1843019) - 3136000
= 675698
fixed var = The difference between the actual amount of fixed overhead and the estimated amount (the amount budgeted when setting the overhead rate prior to the start of the year)
= 1968679 - 1344000 = 624679
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